Alight, Inc. reported fourth‑quarter revenue of $653 million, a 4% decline from $680 million in the same period a year earlier. The drop was driven by a 5% decline in project revenue and a modest 2% decline in recurring revenue, which together offset a 3% increase in professional services revenue. Full‑year revenue fell 3% to $2.262 billion from $2.332 billion in 2024, reflecting the same mix shift that weighed on the quarter.
Gross profit for the quarter was $240 million, or 36.8% of revenue, down from $271 million (39.9%) a year earlier. The margin contraction was largely a result of higher compensation expense and a lower mix of high‑margin recurring contracts. The company’s adjusted EBITDA margin fell to 27.3% from 31.9% in Q4 2024, underscoring the impact of the mix shift and cost inflation.
Alight recorded a non‑cash goodwill impairment of $803 million during the quarter. The charge reflects a reassessment of the value of its acquired businesses and does not affect day‑to‑day operations or cash flow, but it significantly reduced reported earnings and contributed to the sharp earnings loss.
Operating expenses decreased by $37 million year‑over‑year, largely due to reduced professional fees associated with the divestiture of its Payroll & Professional Services business and lower stock‑based compensation. Interest expense rose to $24 million, up $4 million from the prior year, although the company’s full‑year interest expense actually decreased by $11 million compared with 2024.
Alight’s earnings loss from continuing operations before income taxes was $713 million, a reversal from a $55 million profit a year earlier. Adjusted earnings per share were $0.18, missing the consensus estimate of $0.239–$0.24 by roughly 25%. The miss was driven by the goodwill impairment, higher tax expense, and the decline in recurring revenue, which eroded profitability.
Chief Executive Officer Rohit Verma said, “In 2025, Alight delivered revenue of $2.3 billion, strong cash provided by operating activities, and free cash flow.” He added, “In 2025, we did not meet our internal financial targets, and new bookings and renewals did not meet our expectations, leading us to miss our forecast to the market.” Chief Financial Officer Greg Giametti noted that “recurring revenue and project revenue both declined for the year and quarter, contributing to an overall decrease in gross profit.”
The market reaction was negative, driven primarily by the EPS miss and the sizable goodwill impairment. Investors focused on the one‑time charge and the decline in recurring revenue, which raised concerns about the company’s ability to sustain profitability while it transitions to an AI‑enabled technology platform.
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